Global Market Highlight
DJIA rose by +0.03% on Tuesday (29/06) followed by S&P 500 (+0.03%), and Nasdaq (+0.19%). The wall Street closing was higher as the market responded to data showing that the consumption rate is returning to pre-pandemic levels. Meanwhile the energy, traded below the flatline as the spread of the highly contagious delta Covid-19 variant has soured sentiment on demand recovery somewhat just days before major oil producers meet on Thursday and are expected to ease crude production curbs. The market will look forward to several data releases today, such as: 1) US MBA Mortgage Applications; 2) Germany Unemployment Rate; 3) UK GDP Growth Rate YoY Final
Domestic Update
• From the widespread news, the government plans to take an emergency brake on its social restriction policy to curb rising Covid-19 outbreak recently. MNCS comment: We see that enforcement on social restriction is necessary. However if this policy is not accompanied by ramping up testing, tracing, vaccination rate as well as strict implementation of healthcare protocols nationwide will only bring a bleak outlook for 3Q21 as cases continuously emerge. Some sectors that are sensitive to public mobility such as transportation, restaurant & hotel as well as tourism that were hit hard could face a deeper contraction, thus indicating a longer period for recovery.
• Furthermore, there was an addition of 7,379 new Covid-19 cases in Jakarta yesterday.
Company News
1. UNTR IJ recorded sales volume of 167 units of heavy equipment in May 2021, down -24.4% MoM (vs 221 units in April 2021), with sales to the construction sector at 49%, the forestry sector at 23%, construction 18 % and the agribusiness sector by 11%. On the other hand, the sales volume of Komatsu was recorded at 1,076 units in 5M21 or up 38.5% YoY (vs. 777 units in 5M20) (Kontan). MNCS Comment: We see that despite the monthly decline, the YTD sales are still growing. So we still believe UNTR's performance will improve, supported by mining segments as well. Currently UNTR is trading at 10.12x/1.81x PE/PBV levels.
2. INDY IJ will acquire a gold mining company located in Luwu, South Sulawesi, namely Nusantara Resources Limited (Nusantara) with a transaction value of USD45.3 million or with 72% ownership of Nusantara shares. (Emitennews). MNCS Comment: We believe this will increase INDY's revenue stream as the company focuses on diversifying their business toward gold mining. While, INDY through it's entity has obtained 28% ownership of Masmindo. Currently INDY is trading at 0.67x PBV levels.
3. TAPG IJ will distribute FY20 cash dividends of around IDR15.11/share or reaching IDR300 billion from the total FY20 net profit of IDR933 billion. Cum dividend on July 5, 2021 (Kontan). MNCS Comment: TAPG's dividend payout ratio is 32.15% of FY20 net profit, while the dividend yield offered is 2.14%. Currently TAPG is trading at 24.52x/2.12x PE/PBV levels.
IHSG Updates
JCI rose by +0.16% to 5,949.05 on Tuesday (29/06) followed by foreign buy reaching IDR58.30 billion. JCI closing was higher along with most sectors, non-cyclical (+1.48%), followed by industrial (+0.41%), and basic industry (+0.14%). On the other hand, the transport sector slipped by (-1.83%), followed by technology (-1.13%), and health (-0.73%). Most Asian markets weakened, the increase in daily cases and transmission of the delta variant covid-19 is still a barrier to the JCI movement. Meanwhile, the Rupiah exchange rate was weakening at IDR14,485. We estimate the JCI will move in the range of 5,900-6,080 while waiting for inflation rate data MoM release. Today's recommendation: WIIM, LPPF, BTPS, KAEF.
Corporate Action
Cum Dividend Date: SAPX (IDR18/share)
Right Issue: ENRG (IDR126/share)
IPO: MASB (IDR3360/share)
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